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TMI Blog2021 (12) TMI 1010X X X X Extracts X X X X X X X X Extracts X X X X ..... nt of time subsequent to the search - There is nothing on record to suggest or indicate that attempts were made to record the statement of the said Shri Alok Chaudhary who was available. Although these documents contain verifiable clues, no attempts appear to have been made to make inquiries with the persons whose names appear on them. No inquiries appear to have been made with regards to the vehicle numbers featuring on them. No transporter was called to affirm the quantity and the description of the goods transported by the vehicle numbers found mentioned on those private documents - The appellants requested for cross-examination of all those persons whose statements were recorded as well as the Panchas, which were relied upon by the Revenue. However, none of them could be presented by the Revenue for cross examination by the appellants. No positive independent tangible evidence have been produced by the Revenue to substantiate the statements recorded during investigation and the entries made in the private documents which are undoubtedly unsigned, bearing no indication in any form that they relate to the appellant No.1 - specific description of the finished excisable good ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tatement of Sri Vijay Kumar Sinha and Sri Prabhat Kumar Singh, both employees of the said Garg Rerollers Pvt. Ltd. and of Shri Sudhir Kumar Garg, Director of the company were recorded. A further statement of Shri Sudhir Kumar Garg was also recorded on 29.07.2015. After examining the said private records recovered and seized from the said three premises, a Show Cause cum demand notice was issued to both the appellants vide DGCEI F. No. 123/KZU/KOL/JRU/Gr-F/15/6497 dated 15.12.2017. By the said show cause notice, the appellant No. 1 M/s Garg Rerollers Pvt. Ltd was asked to show cause as to why an amount of ₹ 3,92,46,461 as detailed in annexure Q should not be demanded and recovered from them by invoking the extended period of limitation under sub section (4) of section 11A of the Central Excise Act, 1944 and ₹ 25 lakhs deposited during investigation as detailed in Para 3.2.3 of the show cause notice, should not be appropriated against the duty demanded along with interest in terms of section 11AA of the Central Excise Act 1944. The Appellant No.1 was also asked as to why penalty should not be imposed on them under section 11AC(1)(c) of Central Excise Act 1944 read with ru ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , MS angles, MS flats, MS rolls and 354.665 MT of rolling waste clandestinely by way of wilful misstatement and suppression of facts and on such grounds the demand of duty of ₹ 3,92,46,461 has been confirmed by the Impugned order. 7. From the show cause notice and the impugned order dated 19.06.2018, we observe that the entire plank of the case rests on the private loose documents/ Papers which were recovered and seized during searches on 24.07.2013 and the statements of Sri Vijay Kumar Sinha, Sri Prabhat Kumar Singh (both being employees of Appellant no.1) and Shri Sudhir Kumar Garg Appellant no. 2. It is an admitted position that the premises of Alok Raj Associates located at 212, Ashiana Tower, Exibition Road, Patna which is being referred to by the department as the secret office‟ of Appellant no.1, belongs to Shri Alok Chaudhary. Private documents were recovered and seized from this premises, but no statement of Shri Alok Chaudhary was recorded either on 24.07.2013 or at any point of time subsequent to the search. The Department simply relied upon the Panchnama drawn, which was only record of the proceedings and the Appellants have challenged, all the respecti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ter alia, held that It is seen from the records that the entries made in the private accounts where corroborated by Shri Ramdas ShivramSangle, Director of the appellant firm and Shri Sharad Ramdas Sangle, Proprietor of M/s Ambica Scrap Merchant through whom clandestinely remove goods were sold, wherein they had admitted that the entries recorded are true and correct and pertain to the unaccounted production, purchase of raw materials without accounting and sale of finished goods in cash without payment of duty. Further, from the records it is seen that about 16 buyers (referred to in para 11.13 of the impugned order), who purchased the finished goods from the appellants without payment of duty have also confirmed that they had received these goods without the cover of proper excise documentation and without payment of duty. Similarly, two scrap suppliers, Mr. Yunus Ahmed Shaikh and Mr. Shaikh Mushtaq Gulab have also admitted that they supply the MS scrap which is the raw material for the manufacture of these goods without the cover of documents and they have received considerations for sale of such scrap in cash. From this case it is seen that investigation had travelle ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t the same belong to cement. Revenue has taken into consideration the statement of director, which is to the effect that number of bags, figures reflected in the said loose paper. Relate to the cement which stand cleared by them clandestinely. 9. The issue required to be decided is as to whether the said statement alone can be made the basis for arriving at the finding of clandestine removal. What is evidentiary value of the said statement in the absence of other corroborative evidence on record. The Hon ble Delhi High court in a recent judgement in the case of Commissioner of Income Tax verses Dhingra Metal Works has considered the evidentiary value of the statement of director given at the time of search of the factory, sought to be relied upon by the revenue. While examining the evidentiary value of the said statement in the absence of any other evidence, the Hon ble High Court observed that it is settled law though the admission is extremely important piece of admission it can not be said to be conclusive, and it is open to the person who has made the admission to show that this is incorrect Clandestine removal cannot be presumed nearly because there was shortage of stoc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ry 2004 must be taken with the pinch of salt. In the view of the forgoing discussion, I set aside the confirmation of demand against the appellant and in position of penalties upon them. The Appellant submitted their defence contentions in reply to the allegations in Show cause notice in Paragraph 5.0 of their written submissions filed before this bench. 12. We find that the above-mentioned Judgements and orders squarely cover the case of the appellants herein. We observe that no positive independent tangible evidence have been produced by the Revenue to substantiate the statements recorded during investigation and the entries made in the private documents which are undoubtedly unsigned, bearing no indication in any form that they relate to the appellant No.1. Revenue‟s contentions that reliance has been correctly placed on the statements and on the loose private documents/papers does not cut the ice, in the light of the above mentioned decision of the High Court and the Tribunal. 13. Going by the statements, it is found that the name of Shri Umesh Kumar has surfaced, to be the person behind writings on the loose private documents/papers under seizure. It is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (b) instances of actual removal of unaccounted finished goods (not inferential or assumed) from the factory without payment of duty; (c) discovery of such finished goods outside the factory; (d) instances of sale of such goods to identified parties; (e) receipt of sale proceeds, whether by cheque or by cash, of such goods by the manufacturers or persons authorized by him; (f) use of electricity far in excess of what is necessary for manufacture of goods otherwise manufactured and validly cleared on payment of duty; (g) statements of buyers with some details of illicit manufacture and clearance; (h) proof of actual transportation of goods, cleared without payment of duty; (i) links between the documents recovered during the search and activities being carried on in the factory of production; etc. 16. Taking into consideration the allegation regarding suppression of production and clandestine removal of 10279.501 MT of finished excisable goods are true, then it is obvious that for manufacture of aforesaid quantity of finished excisable goods, the appellant would have required to procure and consume commensurate quantity of raw- mat ..... X X X X Extracts X X X X X X X X Extracts X X X X
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